How to Do Business with the Inter-American Development Bank; A by loe13858

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               How to Do
               Business with the
               Inter-American
               Development Bank


               A Primer for
               U.S. Businesses         ★
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         Learn the Procurement Process ★
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         Identify Opportunities        ★
         Access Financing              ★
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    Table of Contents
    Background                                                       1
     IDB Structure                                                   1
     IDB Sectors                                                     1
     IDB Lending and U.S. Firms                                      1
     IDB and the U.S. Department of Commerce                         1


    How to Do Business with the IDB                                  2
     Get Acquainted with the IDB                                     2
     Learn How the IDB Works                                         2
     Identify Projects with Potential Opportunities                  4
     Identify Specific Tenders                                       5
     Learn the Procurement Rules                                     6
     Summary Advice to Prospective Bidders                           7


    The Private Sector and the IDB                                   8


    Important Contact Information                     Inside back cover
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  Background
  The Inter-American Development Bank (IDB) is a multilateral financial
  institution created to help accelerate the economic growth and social
  development of its 26 borrowing Latin American and Caribbean coun-
  tries. Twenty-one non-borrowing nations, including the United States,
  are also members of the IDB. Unlike in the other development banks, in
  the IDB the borrowing nations own the majority of the shares, and many
  of the IDB’s activities are borrower-driven. The presence of IDB offices in
  each of the borrowing countries provides the institution with a distinct
  advantage in understanding its member countries and their challenges.

  IDB Structure
  The Bank mostly provides public sector loans through its three opera-
  tional departments: Southern Cone—Region 1; Mexico/Central America—
  Region 2; and Andean/Caribbean—Region 3. In addition, the Bank has a
  Private Sector Department (PRI) that is responsible for the development
  of private infrastructure projects. The IDB group also includes the Inter-
  American Investment Corporation (IIC) and the Multilateral Investment
  Fund (MIF), which promote private sector investment in the region. A
  more detailed description of these three entities is found below.

  IDB Sectors
  The sectors in which the IDB finances projects include agriculture, industry,
  education, health, information technology and communications, water and
  sanitation, transportation, environment, modernization of the state, social
  investment, and urban development.

  IDB Lending and U.S. Firms
  The IDB lends $6-8 billion annually. Overall funding for each year gener-
  ates hundreds of contracts for U.S. companies to provide a wide range of
  goods, equipment, services, and expertise. Export opportunities for U.S.
  firms vary from a few thousand dollars to several million dollars.

  IDB and the U.S. Department of Commerce
  The U.S. Commercial Service Section, U.S. Department of Commerce,
  is an integral part of the U.S. Executive Director's Office at the IDB. The
  Omnibus Trade Bill of 1988 mandates that Department of Commerce
  staff be located within the U.S. offices of all development banks.
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      The U.S. Commercial Service’s Advocacy Center manages the Department
      of Commerce representatives to the IDB. These representatives provide
      support and assistance to U.S. firms in three primary areas:
      • Information: Information for U.S. firms about the opportunities created
        by IDB projects and how to access these opportunities.
      • Business Facilitation Services: Includes one-on-one counseling,
        strategic planning, information gathering for specific needs, contact
        and meeting planning, and promotional (marketing) support for quali-
        fied firms.
      • Advocacy: Support to U.S. firms that have problems with IDB projects,
        including guidance on the protest process, assistance with payment
        issues, and direct and indirect advocacy with regard to specific prob-
        lems or procurement issues.


      How to Do Business with the IDB
      Although the opportunities for U.S. firms are broad in sector, number,
      and size, taking advantage of these opportunities can be difficult and
      confusing for newcomers. Companies that are successful at doing busi-
      ness with the IDB take the time and effort to learn and network. This
      publication is designed to help guide U.S. firms toward success. The fol-
      lowing section relates to the IDB’s public sector lending program only.
      Information on the IDB’s private sector programs follows later in this
      document.

      Get Acquainted with the IDB
      It is important to understand how the IDB works and what it does. The
      IDB web site, www.iadb.org, provides information on loans under consid-
      eration, approved loans, and procurement opportunities. It also provides
      country strategies, socioeconomic data on the region, press services, a
      calendar of Bank-sponsored events, and other useful information.

      Learn How the IDB Works
      Roles of Borrowing/Non-Borrowing Countries:
      Borrowing countries (26 Latin American and Caribbean nations) are
      expected to provide a portion of the cost of the entire project, sometimes
      in the form of human capital. In addition, only firms from member coun-
      tries, both borrowing and non-borrowing (such as the United States,
      Canada, and Japan), are eligible to compete for contracts (and/or may
      formulate proposals) for IDB-funded projects.




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  Borrowing countries have ministries or agencies called “executing agen-
  cies” that implement projects. These agencies have the following roles:
  • To originate projects for presentation to IDB headquarters, with the
    final decision on loan approval to be made by the IDB Board of
    Executive Directors.
  • To make key decisions throughout the project cycle, including planning
    the project and conducting all aspects of the procurement process.

  Roles of IDB Staff:
  • The IDB supervises the projects to ensure that its guidelines and policies,
    including procurement policies, are followed.
  • Each department assigns specific project team leaders as primary points
    of contact for each project.
  • Sectoral divisions of each regional department have technical experts in
    areas such as environment, energy, transportation, modernization of the
    state, technology, etc.
  • In general, the IDB staff in Washington, D.C., is responsible for the
    preparation of the project for approval by the IDB Board of Executve
    Directors , while the IDB staff located in borrowing countries is respon-
    sible for the supervision of projects that are being implemented.

  The Project Cycle:
  The project cycle at the IDB begins with the identification of potential
  financing during the IDB programming missions to its 26 borrowing
  countries and ends with evaluation of a project after implementation, a
  process that lasts years.
  • In the identification phase, broad issues and parameters of a project, such
     as project cost and executing agency, are identified.
  • During the preparation stage, details of the project are further devel-
    oped. This work tends to be done by the executing agency, with the
    assistance of IDB staff at Headquarters.
  • Once the IDB’s Board of Executive Directors approves the loan, the proj-
    ect goes into the execution, or implementation, phase. The borrowing
    country is responsible for execution of the project, including all procure-
    ment. Therefore, in most cases, firms doing business with IDB-funded
    projects will be working most closely with the borrower, not the IDB
    itself.
  There are potential business opportunities for U.S companies during each
  phase, and sometimes it is important for firms to start business develop-
  ment and marketing activities in the early project development phase.




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      U.S. firms should develop and follow a strategy regarding the project
      cycle. For example:
      • Small companies may wish to focus on trying to get business during
        the project preparation cycle, which offers smaller contracts.
      • Larger firms may choose between doing project preparation and project
        implementation work (doing preparation work may preclude a firm
        from working during the execution phase).
      • Some firms may choose not to do project development work, but focus
        instead on marketing their solutions to a government with the aim of
        having their products or services incorporated into the executing
        agency’s project plans.

      Identify Projects with Potential Opportunities
      In most cases, it is not possible for U.S. firms to propose a project to the
      IDB for funding (private sector projects are the exception). Rather, firms
      need to identify projects that are either under development or have been
      approved that may need their products and services.
      • Project and Procurement Notices are published on the IDB Web site at
        www.iadb.org/procurement. These notices provide information for
        businesses seeking procurement opportunities stemming from IDB-
        financed projects. One can sign up for project and procurement alerts
        through this Web site (see “RSS”). Information on the Bank’s entire
        portfolio of projects, including project description and status, the
        names of the executing agency and IDB team leader, financial data,
        and project documents, is located at www.iadb.org/projects. Both
        pipeline and approved projects are included; contract award and pro-
        curement notice information for approved projects can also be found
        there.
      • The Public Information Center (PIC) Web site, www.iadb.org/exr/pic,
        contains documents generated by the Bank for projects in the pipeline
        and those being implemented. The PIC provides documents related to
        all phases of project design and implementation. Many of these docu-
        ments are free of charge. The PIC may be contacted by e-mail at
        pic@iadb.org, or by phone at (202) 623-2096. These documents are also
        available through the IDB’s 26 Country Offices in Latin America and the
        Caribbean.
      • Press releases, describing all new IDB loans, are distributed to the media
        in the member countries and posted on the Web site.
      • UN Development Business, published by the United Nations, carries in
        every other issue the IDB’s Monthly Operational Summary, listing loan
        and technical cooperation projects under development. It is available
        both in electronic and print formats. The printed version is available




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    twice a month, while the electronic version is continuously updated
    and has search capabilities. A subscription fee is charged for both ver-
    sions. For more information on this document, go to www.devbusi-
    ness.com.
  • The Commercial Section within the U.S. Executive Director’s Office at
    the IDB can help U.S. firms find business opportunities, through direct
    consultation.

  Identify Specific Tenders: Read Project Documents, Track
  Projects, Network, and Strategize
  Investigate Leads:
  Once firms have identified projects with potential opportunities, the next
  step is to investigate leads on specific tenders, or requests for proposals
  (RFPs). While tenders above certain amounts are publicly advertised, in
  most cases the response time is only 30 days. Therefore it is important for
  firms to obtain as much information as possible about these opportuni-
  ties before they are officially announced. As with researching projects,
  there is no single way to obtain this information. The main sources of
  information are project documents and key IDB and executing agency
  staff.
  Project Documents:
  The IDB Web site offers listings of two main categories of documents:
  those related to projects that have been proposed (and are thus in prepara-
  tion) and those reflecting approved financing (see www.iadb.org/projects
  and click onto “status”). The sequence of proposed project documents
  generally begins with a Project Profile I, which is written during the iden-
  tification stage. Once the potential social and environmental impacts of
  projects have been identified, a Profile II, written during the preparation
  stage, is prepared and supercedes the Profile I.
  Once a project is approved for implementation, project documents are
  available on the Web site under “Approved Projects.” Paper copies of
  project documents, except Environmental Impact Assessments, may be
  ordered through the Public Information Center (PIC): (202) 623-2096,
  e-mail: pic@iadb.org). These project documents contain critical informa-
  tion, including broad budgets and procurement plans.
  Network for Critical Information Tenders:
  Personal relationships are key to doing business in many countries, and
  developing business in Latin America and the Caribbean region is no
  exception. Firms interested in winning IDB-funded contracts need to net-
  work with all the stakeholders involved to get critical information about
  when and how tenders are announced. In most cases, this information
  will not be written in any document or posted on the Web site—it will



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      only be available through personal discussions. “Stakeholders” usually
      refers to the executing agency and IDB staff in country and/or in
      Washington, D.C. (depending on the stage of project). Other borrowing
      government agencies may be involved as well. U.S. Commercial Service
      staff at the IDB and U.S. embassies in borrowing countries can also help
      companies track projects.
      The IDB’s Business Seminars offer excellent opportunities to network
      with IDB Headquarters staff. These seminars focus on a particular sector
      such as health, education, environment, energy, water and sanitation,
      urban development, and modernization of the state. The seminars are
      held at IDB headquarters in Washington, D.C., and occasionally at loca-
      tions around the country. Information on the Business Seminars can be
      found on the IDB Web site at www.iadb.org/events or by contacting the
      IDB’s Office of External Relations (EXR) at (202) 623-1546, fax (202) 623-
      1403, or e-mail: business@iadb.org.
      Work with Partners from the Borrowing Country:
      U.S. businesses can maximize their chances of receiving a contract award
      by working jointly with a business representative from the borrowing
      country. This is because most of the planning and implementation work
      for a project is done locally. A local representative can help you with
      marketing to the client, obtaining business information, understanding
      the client’s needs, and providing better service to the client.
      The U.S. Commercial Service can assist U.S. businesses with identifying a
      representative through its International Partner Search program, the Gold
      Key Matching Service or other customized programs. For more informa-
      tion on these services, contact the nearest U.S. Export Assistance Center
      in your area at www.export.gov/eac.
      The IDB Country Offices can also provide some suggestions on potential
      local partners. Contact information can be found at www.iadb.org/countries.
      Learn the Language:
      Spanish is the “lingua franca” at the IDB and in most of the borrowing
      countries. Firms looking for IDB business need to be prepared to work in
      Spanish, although in some countries English, Portuguese, or French is
      required.

      Learn the Procurement Rules
      Bidders in IDB-funded projects have both rights and responsibilities for
      participation, and it is important for U.S. firms to understand these when
      bidding. Two documents are essential for U.S. firms interested in IDB
      opportunities: Policies for the Selection and Contracting of Consultants
      and Policies for the Procurement of Works and Goods Financed by the
      IDB. These sources outline the rules and procedures that borrowing agen-




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  cies are required to use when procuring goods and services and can be
  obtained on the IDB Web site at www.iadb.org/procurement.
  When firms know the rules, they understand that they are responsible
  for alerting the borrowing country to problems with the specifications or
  bidding procedures, informing the IDB, and contacting the U.S. Executive
  Director’s Office with concerns about the bid packages. U.S. firms are
  encouraged to report any discrepancies they find when reviewing loan and
  bidding documents.
  The IDB has published a set of standardized bidding documents that are
  available online. Although not yet required for all IDB-funded projects,
  these standard documents can help a U.S. company prepare for the
  requirements of a bid. All of the procurement-related documents are
  available on the IDB Web site at www.iadb.org/procurement.
  These guidelines are used in all procurements over the designated thresh-
  olds, which generally are $200,000 for consulting services, $250,000 for
  goods, and $3,000,000 for civil works, but vary by project and country.
  A very good way to learn about procurement policies and procedures at
  the IDB is through its yearly procurement workshops held in Washington,
  D.C. Information on these workshops can be found on the IDB Web site
  at www.iadb.org/events.
  Tenders are announced in local publications and the United Nations
  Development Business publication, described earlier.

  Summary Advice to Prospective Bidders
  Procurement is a complicated subject well beyond the scope of this docu-
  ment. However, firms that follow these tips are the most successful:
  • Meet and develop relations with borrowers long before
    tenders are announced.
  • Obtain critical information through networking.
  • Use local representation.
  • Learn the procurement rules.
  • Train local representatives on IDB procurement rules.
  • Identify problems with specifications immediately and alert borrowers,
    the IDB and the U.S. Executive Director’s Office.
  • Follow bidding documents to the letter.
  • Comply fully with all requirements.
  • Protest when necessary.
  • Be a reliable supplier.




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      Small Contracts:
      Procedures for procurement under small contracts may vary greatly from
      the IDB guidelines. In some cases the borrowing country’s government
      procurement laws will be used as long as they are not in conflict with the
      IDB’s rules. Usually, this requires the publication of a request for proposal
      (RFP) in a local newspaper. For these small procurements, especially for
      consulting contracts, networking is even more important as there may
      not be any public announcements to respond to. It is important to talk to
      stakeholders to determine their procurement needs, express interest in
      being a supplier, and ask about procurement plans and timelines.
      Although information on small contracts may be more difficult to find,
      sometimes it is easier to access these opportunities, due to less
      competition and fewer procurement rules.


      The Private Sector and the IDB
      In addition to the public sector lending described above, the bulk of its
      financing, the IDB lends money to various private sector projects. U.S.
      firms in many cases may be eligible to receive funding for their invest-
      ments in Latin America. Three units in the IDB Group primarily operate
      the private sector programs:
      Multilateral Investment Fund (MIF):
      The MIF supports pilot projects for institutional, legal, and regulatory
      reform; labor training; and small business and micro-enterprise develop-
      ment. The MIF also funds projects managed by Latin American or
      Caribbean governments or non-governmental organizations that promote
      a healthy, functioning private sector. For more specific details visit
      www.iadb.org/mif.
      Inter-American Investment Corporation (IIC):
      The IIC invests debt and equity in small to medium-sized Latin American
      and Caribbean firms, both directly and indirectly, through funds or bank-
      and government-managed credit lines. The IIC finances up to 25 percent
      of a total project’s cost. Detailed information on the IIC can be found at
      www.iadb.org/iic.
      IDB Private Sector Department (PRI):
      The PRI finances private sector infrastructure projects without
      government guarantees. The projects are in such sectors as energy,
      transportation, sanitation, communications, and the development of
      local capital markets. It can finance up to 25 percent of the total project
      cost. Although the projects themselves must be in a Latin American or
      Caribbean country, there is no restriction on the national origin of the
      project sponsors. For more information visit www.iadb.org/pri.




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   Important Contact Information
   • The IDB’s Web site address is www.iadb.org.

   • The IDB’s Public Information Center can be reached at
     pic@iadb.org or (202) 623-2096.

   • For information on the IDB Business Seminar Series that
     includes the procurement workshop, visit www.iadb.org/biz or
     call (202) 623-1546.

   • The IDB Bookstore, for procurement guidelines and other publica-
     tions, can be accessed through www.iadb.org/exr/pub, by e-mail at
     idb-books@iadb.org or by phone at (877)-PUBS-IDB.

   • Development Business, a bi-monthly United Nations publication,
     can be ordered from:

      Development Business
      P.O. Box 5850
      Grand Central Station
      New York, NY 10163-5850
      Tel: (212) 963-8524 Fax: (212) 963-1318
      E-Mail: dbsubscribe@un.org.

   • For U.S. export assistance with IDB-sponsored projects, contact:

      U.S. Commercial Service Section
      U.S. Executive Director’s Office
      Inter-American Development Bank
      1300 New York Avenue, N.W. Mail Stop E 0249
      Washington, D.C. 20577
      Tel: (202) 623-1179 or 3821/22/42 Fax: (202) 623-2039
      E-Mail: iadb.banks@mail.doc.gov

      U.S. Commercial Service’s Trade Advocacy Center
      U.S. Department of Commerce
      1401 Constitution Avenue N.W. Room 3814A
      Washington, D.C. 20230
      Tel: (202) 482-3896 Fax: (202) 482-3508
      Web site: www.export.gov/advocacy


      For information on U.S. Commercial Service domestic and
      international offices, services, and market research, visit
      www.export.gov
 Put the U.S. Commerical Service’s
Advocacy Center section at the IDB
    to work for your company.

                     Visit
         export.gov/advocacy
                 or call us at
            (202) 482-3896




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in more than 80 countries, the U.S. Commercial Service
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